The Supreme Court issued a ruling yesterday on a consolidated pair of cases that looked initially like a win for property rights. (Decker v. Northwest Environmental Defense Center and Georgia-Pacific West, Inc. v. Northwest Environmental Defense Center.) Interpreting Environmental Protection Agency authority, the Court held 7-1, with Justice Kennedy writing for the Court, Justice Scalia concurring in part and dissenting in part, and Justice Breyer recusing himself, that logging companies and Oregon forestry officials did not have to obtain EPA permits for storm-water runoff from logging roads, contrary to what the NEDC had argued and the Ninth Circuit below had held.
As so often happens, however, the underlying issues were far more complicated and important, involving basic administrative law questions and fundamental separation-of-powers principles. In particular, the question Scalia pressed was this: Should a court give deference—known as Auer deference—to an administrative agency’s interpretation of its own regulations? Bad enough that courts give excessive Chevron deference, as it’s known, to agencies’ interpretations of congressional statutes when agencies write and enforce regulations pursuant to the statutes. When agencies, in addition, get not only to write but to interpret their own regulations, it’s a prescription for mischief, as Scalia made clear.
As a general matter, we at Cato have long argued that Congress delegates far too much of its legislative authority to executive branch agencies. After all, the very first sentence of Article I of the Constitution reads: “All legislative Powers herein granted shall be vested in a Congress ….” (emphasis added) As a practical matter, Congress has always had to delegate some rule-making authority to the executive branch. With the vast expansion of Congress’s legislative powers during the New Deal, however, that delegation has grown exponentially, along with the hundreds of agencies Congress has since created. Today, most of the law we live under, except at the broadest level, is written not by Congress but by those agencies. Do we need any better example than Obamacare? Over 2,000 pages long, that Act pales in comparison to the volumes of regulations now being written in the agencies to give it effect. All of which raises the question, what’s the role of the courts in all of this?
The substantive question here was whether stormwater runoff from two logging roads violated regulations the EPA had written pursuant to the Clean Water Act. Thus, although the environmental plaintiffs lost, that does not mean, as might be thought, that the decision was a win for proponents of property rights. This was a question of whether logging enterprises were using their property in a way that protected the public’s property interests in clean water. That’s what the regulations were written to ensure. The Court had before it, therefore, a question of regulatory interpretation and application in light of the facts. Without going into the complex statutory and regulatory parsing that both the Court and Scalia engaged in—see the decision to work your way through that—suffice it to say, again, that Kennedy simply deferred to EPA’s interpretation of its own regulation: Auer deference, which accepts an agency’s reading of its own regulation unless it is “plainly erroneous or inconsistent with the regulation.” By contrast, carefully invoking several interpretive canons, Scalia argued that in so deferring the Court had upheld EPA’s unnatural reading of its regulation. He would have found for the NEDC. (So much for Scalia the result-oriented conservative.)
Although I believe Scalia had indeed the “more natural” reading of the regulation, the larger, constitutional issue is the more interesting one, namely, whether such deference as the Court had given is consistent with the separation of powers, and on this, Scalia is at his best. Addressing the contention that the agency possesses special expertise in administering its complex and highly technical regulatory program, he answers:
That is true enough, and it leads to the conclusion that agencies and not courts should make regulations. But it has nothing to do with who should interpret regulations…. Making regulatory programs effective is the purpose of rulemaking, in which the agency uses its “special expertise” to formulate the best rule. But the purpose of interpretation is to determine the fair meaning of the rule—to “say what the law is,” Marbury v. Madison. Not to make policy, but to determine what the law is.
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